Healthcare stocks have been in the limelight since the start of the pandemic, with some shares gaining significantly. So, which ones still look good for savvy investors as we move to a post-pandemic world?
Where Can I Buy Healthcare Stocks in June 2021?
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Which Healthcare Stocks to Buy in June 2021?
Investors can select from a wide range of stocks from the healthcare sector: drug development companies, medical equipment manufacturing companies, health insurance companies, and hospitals or healthcare service providers. Our shortlist contains stocks that have the potential of generating higher returns because of their promising fundamentals, which could rally the stocks in the near term.
1. UnitedHealth Group Inc (NYSE: UNH)
American health insurance and managed healthcare company UnitedHealth Group has generated a return of 24% over the past 3 months. The company recorded revenue of $70.2 billion in Q1 2021, an increase of 9% from Q1 2020 revenue of $64.42 billion. Earnings per share (EPS) for Q1 2021 stood at $5.31, an increase of 42.7% from the same quarter last year. The company’s management expects that the company will increase the full-year EPS to $18.60 in the ongoing year, which can provide you with decent upside potential on the stock.
Things will improve further for UnitedHealth if the pandemic remains under control, which will increase premium payments that saw a reduction during the peak of the pandemic.
2. Amgen (NASDAQ: AMGN)
Amgen is a leading American biotechnology company with diversified products focusing on different therapeutic areas. The company reported a free cash flow of $1.9 billion in its Q1 2021 balance sheet, which it can use for its R&D activities. Though the company posted a decline of 4% in revenue year-over-year in Q1, many of its products produced volume growth despite missed patient visits due to Covid-19. Many of the products in its pipeline are undergoing clinical trials or are in the approval phase.
Amgen stock has gained 4.5% over the past six months. It has a dividend yield of 2.9%, and its P/E ratio is reasonably cheap at 14x.
3. Stryker Corporation (NYSE: SYK)
Michigan-based medical technology company Stryker has gained roughly 5% over the past five months. The company manufactures medical devices that are used in orthopedic procedures. The company’s Q1 2021 revenue stood at $3.95 billion (up 10% from the same quarter last year) and it announced an interim dividend of $0.63 per share for Q1 2021 (up from $0.575 in Q1 2020).
Stryker has more than 1,000 of its Mako robots installed to perform hip and knee replacement surgeries, with the possibility of increasing the tally to 4,500 robots globally. In 2020, Stryker acquired medical device company Wright Medical Group to augment its extremities and trauma business. The acquisition contributed roughly 6% to the company’s sales growth in Q1 2021.
Our analysis suggests that the company has strong growth prospects in the post-covid environment, and you should be assured dividends because Stryker has raised its dividend payouts for 26 consecutive years.
4. CVS Health Corp (NYSE: CVS)
American corporation CVS Health Corp has thousands of retail pharmacy stores spread across the United States. The stock has gained approximately23% over the past five months on the back of strong first-quarter results. The company recorded total revenues of $69.1 billion, up 3.5% year-over-year. Diluted EPS increased to $1.68, which is an increase of 9.8% from the same quarter last year. Cash flows from operations at the close of the quarter amounted to $2.9 billion. The company also updated its full-year guidance and posted encouraging figures.
Although this stock has already rallied by over 20% during the year, you could benefit from the strong fundamentals by buying on the dips.
5. Intuitive Surgical (NASDAQ: ISRG)
Intuitive Surgical is an American company that manufactures robotic products used for performing minimally invasive surgeries. The company’s most advanced Da Vinci robotic system has been used extensively in performing surgical procedures. It sold 298 robotic systems in the first quarter as compared to 237 in the same quarter last year, and its first quarter revenue increased to $1.29 billion.
Intuitive Surgical’s stock gained roughly 9% over the past six months. In March, the stock closed at a low of $684.90 before advancing to a six-month high of $891.38 in April, gaining roughly 30% from the lows.
You can consider buying Intuitive Surgical stock as it has many positive triggers that can push the stock higher. For example, analysts believe that the reduction in Covid-19 cases will increase the volume of surgical procedures.
6. Cerner Corporation (NASDAQ: CERN)
Cerner Corporation is an American company that provides information technology services and products to healthcare facilities around the world. The company has been in business for over 40 years and has been providing services to some of the world’s largest healthcare organizations. Cerner Corporation earns recurring revenue from its clients thanks to its efficient and robust HealtheIntent platform that manages payments and receipts for big organizations. With strong business fundamentals, Cerner Corporation could be a decent healthcare stock for investment.
7. Medtronic Plc (NYSE: MDT)
Medtronic manufactures medical devices and also provides technological solutions to healthcare organizations. The company’s devices are used for treating diseases such as Parkinson’s disease, Down syndrome, heart failure, and diabetes. The company released encouraging Q1 results and reported quarterly revenue of $8.2 billion: an increase of 37% from the same quarter last year. Net Income also jumped by a massive 162% to reach $2.038 billion during the quarter. The positive results show that demand for the company’s product is strong, which makes it a good prospect for investment.
Why Buy Healthcare Stocks in June 2021?
Most companies that developed the Covid-19 vaccines have already seen their stocks soaring sky high. If you think you are late to this game, you can still find plenty of investment opportunities in the healthcare sector. Some of the healthcare stocks reported subdued revenues and earnings because of the pandemic disruptions. However, with the vaccination drive in full swing and the virus hopefully coming under control, we might expect many healthcare stocks to rebound stringly by the end of 2021. So, it makes sense to find out the best value healthcare stocks in June 2021 to ride the wave of potential gains.
The Bottom Line
Healthcare stocks have been on investors’ radars for the past year and a half because of the race to develop an effective Covid-19 vaccine. Shares in companies such as Moderna and Novavax registered significant gains between the start of 2020 and May 2021.
Though companies are still getting orders for the vaccines, most of the positive impact seems to have been priced in. Therefore, in June this year, you might want to seek other healthcare stocks with good fundamentals that could see share price increases in the post-pandemic world.